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UK roundup: Merchant Navy, Pirelli schemes agree derisking deals

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Derisking transactions covering some £590m (€670m) of pensioner benefits at four schemes have been announced.

The £3bn Merchant Navy Officers Pension Fund (MNOPF) sealed a £490m buy-in with Legal & General Group, covering all members that retired since it completed a £1.5bn longevity insurance transaction in 2014.

Andy Waring, chief executive of the MNOPF, said: “Securing the benefits of our members has always been a significant part of the MNOPF journey plan. Our next milestone is to promote and grow the [defined contribution] Ensign Retirement Plan, so that we can provide the same security in retirement for the next generation of maritime employees.”

Separately, three defined benefit (DB) pension schemes linked to Italian tyre company Pirelli Group concluded a buy-in with Pension Insurance Corporation (PIC), covering around £100m of benefits. The transaction means that the three schemes are completely de-risked, according to a statement from PIC. 

Last year Pirelli’s main UK DB schemes completed longevity swaps worth £600m with Zurich Assurance.

LGPS launches investment management consultancy procurement framework

UK local authority pension funds and their fledgling asset pools have finalised a new framework for the procurement of investment management consultancy services.

It is a restructuring of the first national framework of its kind, launched in 2013. According to a statement, since then 27 local government pension scheme (LGPS) funds from across the UK had joined the original seven founder authorities participating in the framework. 

A total of 34 contracts have been agreed under the framework with savings estimated to reach over £3.6m.

The organisation overseeing national LGPS frameworks said the 2013 concept was “fully refreshed and restructured” to meet the current and future needs of the LGPS, including the pooling arrangements.

Nigel Keogh, National LGPS Frameworks operations and development manager, told IPE that the new framework included different “lots” because the asset pools would have different requirements to individual funds. The previous framework only had one lot. 

The new framework is split into lots for investment consultancy services; manager search, selection, monitoring and review services; and investment management consultancy-related specialist services. 

The new framework was the outcome of collaboration between Brunel Pension Partnership, Cambridgeshire County Council, Cheshire Pension Fund, the London Boroughs of Hackney and Tower Hamlets, Merseyside Pension Fund, Norfolk Pension Fund, Northamptonshire County Council and West Sussex Pension Fund.

It was supported by the National LGPS Frameworks team, and procurement and legal specialists from Norfolk County Council.

Frameworks for transition management and implementation services are due to be ready soon. 

Minimum standards for professional trustees 

New standards outlining what is expected of professional trustees were published for consultation today.

They have been drawn up by the industry-led Professional Trustee Standards Working Group (PTSWG) to establish minimum requirements for professional trustees of occupational pension schemes.

The group has set out standards in six areas that all professional trustees are expected to meet:

  • Fitness and propriety;
  • Integrity;
  • Expertise and care;
  • Impartiality and conflicts of interest;
  • Professional behaviour;
  • Systems and controls.

Specific guidelines were set out for professional trustees who were also the chair of a scheme, and for those who were the sole trustee of a scheme. Topics range from having the skills to lead, negotiate and reach a consensus to providing strategic direction and actively challenging advice.

Andrew Bradshaw, chair of PTSWG, said: “With the growing influence of professional trustees, it is important that the industry adopts a recognised set of professional standards. 

”The challenge for the PTSWG has been to produce a set of universal standards which recognise the wide range of business structures and services that professional trustees and their firms now provide.  We very much hope that the standards strike the right balance and look forward to hearing the views of professional trustees and the wider industry during the consultation period.”

The consultation will run until 2 March 2018. After the standards have been published the PTSWG will develop an accreditation framework, which professional trustees will be expected to meet.

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